PRINCIPLES OF MANAGEMENT

MANAGEMENT

Nature and Scope of Management Management Process Role of a Manager Functional Areas of Management Development of Management Thought

MEANING OF MANAGEMENT
Process what a manager Persons who does: manage planning Board of directors Organizing Management Staffing director coordinating Chief executive controlling General manager Functional manager Noun Discipline body of knowledge and its practice Art of getting things done Based of scientific principles of management Art and science of decision making and leadership

Material human resource Men material machinery money methods

Methods to achieve the desired goals Production Services Profit satisfaction

PLANNING

CONTROLLING

ORGANISING

PROCESS OF MANAGEMENT

CO-ORDINATING

STAFFING

DIRECTING

PRODUCTION MANAGEMENT

OFFICE MANAGEMENT

MARKETING MANAGEMENT

ASPECTS OF MANAGEMENT

PERSONAL MANAGEMENT

FINANCIAL MANAGEMENT

MEANING OF MANAGEMENT
As a noun As a Process

Social Process Integrated Process Interactive Process Continuous Process

As a Discipline As a Activity As a Group`

Concepts of Mgt.
Functional concept Human relation concept What a manager does Art of getting things done

Leadership& Decision Making

Productivity

Art & science of decision making

Securing maximum productivity Co-ordination of human and material resources

Integration

GENERALISED DEFINITION
INPUT OUTPUT DIRECTING PLANNING

PRODUCTION SERVICES

MEN MATERIAL MACHINERY MONEY

PROCESS OF MANAGEMENT
CONTROLLING ORGANISING

PROFITS SATISFICATION SOCIAL JUSTICE OTHERS

METHODS

OBJECTIVES OF MANAGEMENT
Improving

performance Proper utilization of resources Mobilizing talents Planning for future

IMPORTANCE OF MANAGEMENT
Achievement

of group objectives Optimum utilization of resources Minimization of cost Increased profit Smooth running of business Provides innovation Change of growth Social benefit Helps in developing economy

NATURE AND CHARACTERSTICS

Group activity Goal oriented Factor of production Universal in character Needed at all levels of Organization Distinct process Social process System of authority Dynamic function Art & science Profession Intangible Multi- disciplinary

IS MANAGEMENT A SCIENCE OR ART

As an ART
Personal skill Practical knowledge Result oriented approach Regular practice Creativity

As a SCIENCE Systemized body of knowledge Continued observation Universal application Cause and effect relationship Validity and predictability

MANAGEMENT AS PROFESSION
Specialized techniques of knowledge Formalized methods Professional association Code of conduct Priority of service over economic consideration

LIMITATIONS OF MANAGEMENT AS SCIENCE

No fundamental truths Not always universal Human science management cannot be predictable Management lacks certainty

BUSINSS ADMINISTRATION AND MANAGEMENT

They are two different terms

the formulation of objectives and overall policies of an enterprise and management as an execution of policies

- Schulze considers administration as being concerned with Management is a generic term that includes administration Management and administration are one

Three Levels of Management

Top Managers

Middle Managers
First-line Managers Non-management

F W Taylor

Father of Scientific Management

Principles of scientific management (replaced rule of thumb) Organization theory (replaced personalized autocracy/degrees of benevolence, eg, Quaker family businesses Cadburys and Clarks)

Father of Scientific Management

Published paper on cutting metal scientifically Later Designs of shovels permit worker to shovel for the whole day reduced number of workers at Bethlehem Steel Works from 500 to 140 1895 Papers on incentive schemes, eg, piece rate (studied using stop watch time study; analysis of work design leading to method study) 1909 Text: Principles of Scientific Management
1881

Father of Scientific Management

Objectives of management under scientific management:
1.

The development of a science for each element of a mans work to replace the old rule-of-thumb methods The scientific selection, training and development of workers instead of allowing them to choose their own tasks and train themselves as best they could. The development of a spirit of hearty cooperation between workers and management to ensure that work would be carried out in accordance with scientifically devised procedures The division of work for which it is best fitted instead of the former condition in which responsibility largely rested with the workers. Self-evident in this philosophy are organizations arranged in a hierarchy, systems of abstract rules and impersonal relationships between staff.

2.

3.

4.

Father of Scientific Management

Taylors framework for organizations:
1 2

Clear delineation of authority Responsibility

3
4 5 6

Separation of planning from operations

Incentive schemes for workers Management by exception Task specialization.

Father of Scientific Management

Underlying assumptions

The presence of a capitalist system and a money economy, where companies in a free market have improvement of efficiency and the maximization of profit as their main objective . The Protestant work ethic, that assumes that people will work hard and behave rationally to maximize their own income, putting the perceived requirements of their organization before their own personal objectives and goals That an increased size is desirable in order to obtain the advantages of the division of labour and specialization of tasks.

Father of Scientific Management

Legacy:

Work study Work design Work measurement Production control Time and motion study Piece work

Scientific Management

Defined by Frederick Winslow Taylor, late 1800s. The systematic study of the relationships between people and tasks to redesign the work for higher efficiency.

Taylor sought to reduce the time a worker spent on each task by optimizing the way the task was done.

Techniques of Scientific Management

Work study

Scientific task Planning Scientific selection, placement & training of workers. Standardization and simplification Mental Revolution. Taylors Differential piece rate system. Functional Foremanship.

WORK STUDY
Time study : Standard time needed to perform every job Motion Study : To analyze the movements of workers from one place to another during working hours. Wasteful movements. Method study: Aims at determining the most appropriate method of doing any job. Fatigue study: Physical & mental exhaustion ideal time to introduce break time.

 Scientific task planning: Lays down

production targets & achieving them. Low cost of production, specialization, optimum use of resources, etc. Scientific selection, placement, & training of workers: Right man for the right job. Standardization & simplification: Standards for material used for manufacture, time , method used, and working conditions. Mental revolution: Increase the size of surplus instead of quarrelling over sharing the surplus.

Differential piece rate system.

Two rates to be set: Standard output output 10,000 units High rate (eg. Rs 100 per unit ) for those who achieve the standard or more. Low rate (eg . Rs 50 per unit ) for those who cant achieve the standard.

Functional Foremanship (8 persons)

3 persons in production Planning. 1) Route clerk 2) Instruction card clerk 3) Time & cost clerk. 4 persons in the factory. 1) Gang boss 2) Speed boss. 3) Repair boss. 4) Inspector

Disciplinarian

Problems of Scientific Management

Managers often implemented only the increased output side of Taylors plan. They did not allow workers to share in increased output. Specialized jobs became very boring, dull. Workers ended up distrusting Scientific Management. Workers could purposely under-perform Management responded with increased use of machines.

Administrative Management

Seeks to create an organization that leads to both efficiency and effectiveness. Max Weber developed the concept of bureaucracy.

A formal system of organization and administration to ensure effectiveness and efficiency.

Weber developed the Five principles

Henri Fayol(1841- 1925)

Fayols contribution to management: 1. Classification of business activities- 6 groups

Technical ( production) Commercial (buying, selling, exchange) Financial Security ( protection of property / persons) Accounting Managerial (PODSCORB)

2. Elements of management

Planning Organising Commanding Coordinating Controlling

3.Universal Principles of Management 14 Principles of Management Universal applicability

4. Managerial Qualities & Training Physical health, vigour and address Mental ability to understand and learn,

judgment & adaptability Moral energy, firmness, loyalty, acceptance of responsibility General Education- general acquaintance Special knowledge - peculiar to function Experience arising from the work proper

Henry Fayol, developed a set of 14 principles:

1. Division of Labor: allows for job specialization. Fayol noted firms can have too much specialization leading to poor quality and worker involvement. 2. Authority and Responsibility: Fayol included both formal and informal authority resulting from special expertise. 3. Unity of Command: Employees should have only one boss. 4. Line of Authority: a clear chain from top to bottom of the firm. 5. Centralization: the degree to which authority rests at the very top. 6. Unity of Direction: One plan of action to guide the

Fayols Principles

Fayol s Principles
8. Order: Each employee is put where they have the most value. 9. Initiative: Encourage innovation. 10. Discipline: obedient, applied, respectful employees needed. 11.Remuneration of Personnel: The payment system contributes to success.

12. Stability of Tenure: Long-term employment is important. 13. General interest over individual interest: The organization takes precedence over the individual.
14. Esprit de corps: Share enthusiasm or devotion to the organization.

1.Constructive Conflict

MARY PARKER FOLLETT

integration is the best way to resolve conflict, than domination or compromise. Individual differences integrated to form new opinion.

2. Laws of SituationDepersonalise the giving of orders Agree to take orders from a given situation Analyse & take decisions as per market situations

3.Leadership

Not a matter of dominating personality Managers should not be autocratic Leadership product of knowledge, rather than position

MARY PARKER FOLLETT

4. Authority & Responsibility

Concept of final authority inherent should be replaced by an authority of function Authority & responsibility go with function.

5. Principles of Co- ordination - principles of effective to achieve effective co

ordination: Co-ordination in the early stages Co ordination by direct personal contact among persons concerned. Co- ordination of reciprocal relation of all factors Continuous process

PETER F DRUCKER
CONTRIBUTIONS: Nature & role of management Managers job

Economic performance Productive work & worker achieving Managing social impacts & social responsibilities Business objectives & social responsibilities Entrepreneurial functions Management by functions & self control Federal decentralisation Organisation structure Decision making Management development Futurity.

ROLE OF A MANAGER
Meaning: A person in the organisation who directs others. Has different names at different levels. First line managers are either foremen pr supervisors. Functional are middle level managers Top level president vice- president, managing director etc.

Managerial Skills
Physical health, vigor and address Mental ability to understand and learn Moral energy, firmness, loyalty Educational Technical - peculiar to function Experience arising from the work proper

SKILLS OF MANAGEMENT
Technical

skills Human skills Conceptual skills Diagnostic skills

SKILLS AT DIFFERENT LEVELS

TOP MANAGEM ENT

Conceptual skills

MIDDLE MANAGEM ENT

Human skills

LOWER MANAGEM ENT

Technical skills

QUALITIES OF A MANAGER

Education Intelligence Leadership Training Technical knowledge Maturity Positive attitude Self confidence Foresight

INTERPERSONAL Figure head Leader Liaison INFORMATIONAL Monitor Disseminator Spokes person DECISIONAL Entrepreneur Disturbance handler Resources allocator Negotiator

ROLE OF MANAGER